Gaudioso v Roads and Maritime Services [2019] NSWLEC 10 | Case summary

The Issues in the Case

The Applicants presently seek compensation in the amount of $28,249,717.62, $28M of which represents Market Value.
RMS offered them $10,392,236.00, as determined by the Valuer General ("VG"), of which $9,670,000.00 was stated to be in respect of Market Value.
The primary dispute emerging from the documents so far filed in the proceedings, in advance of the filing of Points of Claim ("POC") and Points of Defence ("POD"), concerns the question of the underlying zoning of the acquired lands, valued as a development parcel. The Applicants allege that the zoning of the subject land "was held back because of the proposal to carry out the public purpose" (Tp9, LL48-49).
Ms Hemmings conceded (Tp33, L13) that it was at least "likely that the underlying zoning will be in dispute".
The claim for compensation was put to the VG on that basis, by the Applicants' solicitors, on 8 January 2018. In short, they said:

In the absence of the proposal to carry out the public purpose for which the land is to be acquired (WestConnex), the site's zoning would have already been changed from 'IN2 Light Industrial' to 'B4 Mixed Use'. The zoning would have permitted more intense development with residential accommodation above ground floor commercial premises.
The site's current IN2 Light Industrial zoning has been maintained as a consequence of the proposal to carry out the public purpose for which the site was acquired. The site's now anticipated future zoning is 'Zone B5 Business Development' rather than the B4 Mixed Use zone. This is also a consequence of the WestConnex proposal and the preparation of the Parramatta Road Corridor Urban Transformation Strategy.

Mr Hemmings submits (Tp15, L45-p16, L8): The IN2 zoning was retained because of the proposal to carry out the public purpose, and so in relation to the Camperdown industrial precinct, we want documents that were prepared or held in the course of considering or deciding the planning controls of the Camperdown precinct. It appears to us that it's plainly relevant to an underlying zoning argument to understand the approach that has been taken to the Camperdown industrial precinct. The subpoenas are being issued and the notices to produce have been issued to the council, so we know the approach that they have taken. It has been issued to the [DOP], ... who is the body that one would ultimately have to make any LEP if land was to be rezoned and is clearly potentially participating in any rezoning consideration.
As already noted, the subject acquisition was gazetted on 9 February 2018.
On 6 March 2018, the market value claim for $28M was again specifically articulated.
On 5 June 2018, RMS offered a total of $10,392,626.00 in response.
The proceedings were commenced on 21 June 2018.
Not all the parties' competing expert planning evidence is yet available.
However, the RMS planner, Anthony Rowan, opined on 22 February 2017, i.e. prior to the acquisition (Exhibit "KED-3" to Kalinda Doyle's affidavit 23 November 2018, tab E, executive summary on folio 250), that he would advise a party to a hypothetical sale of the acquired land, as at that date, in the following terms: Zoning, absent the public purpose. a) I am instructed the Parramatta Road Urban Transformation Strategy ('strategy') was prepared by Urban Growth to provided guidance and consideration for future land use planning and development decision as part of the provision of WestConnex, the public purpose. As such, the strategy is to be disregarded in consideration of the highest and best development potential of the subject land. b) The current IN2 Light Industrial zoning under the LEP of the subject land was not influenced by the public purpose. c) The zoning of the land would have been IN2 Light Industrial.
The Statement of Evidence provided already in the case by the Applicants' Planner, Giovanni Cirillo, on 14 November 2018 (Exhibit "KED-1", Vol 1, to Doyle's affidavit 23 November 2018) concludes (at folios 28-29): Conclusion 133. In 2013 the Council were (sic) working towards finalising the LEP 2013. 134. In June 2013 the Council adopted the Leichhardt Employment and Economic Development Plan 2013-2023: 10 Year Strategic Plan. According to the 10-year plan deindustrialisation was a trend continuing to result in the decline of traditional manufacturing and industrial jobs. 135. At the same time the Council also adopted the Leichhardt Employment and Economic Development Plan: 4-year Service Delivery Plan 2013-2017. Action 2 of the 4-year plan provided for the undertaking of a detailed master planning for the Parramatta Road corridor to facilitate renewal. 136. In April 2014 the proposed Memorandum of Understanding was reported to Leichhardt Council. This memorandum of understanding provided a representation of the origins of what (sic) because the Parramatta Road Urban Transformation Strategy, as understood in early 2014. The Parramatta Urban Transformation Strategy (which began as the Parramatta Road Urban Renewal Program) and WestConnex proposal are inextricably linked (such that the former is caused by the latter public purpose). 137. On 23 July 2013 the councillors resolved that a Strategic Sites, Centres and Corridors Study for Parramatta Road from Johnston St to Mallet St and Johnston's (sic) be brought forward to be commenced as soon as possible. 138. The Council was in the process of proceeding with the preparation of a detailed masterplanning exercise for Parramatta Road. In determining the planning controls applicable to the site the next step was to carry out some sought (sic) of urban design analysis responding to the terms of reference identified in in (sic) Council resolution C320/13 and in the 4 year-year plan. 139. Prior to May 2014 when Council was briefed on WestConnex the Strategic Sites, Centres and Corridors Project had been commenced with a study of the area of Parramatta Road from Johnston Street to Mallet Street and Johnstons Creek. Under this project, Parramatta Road was identified as "an important location for urban renewal" and for "strategic re-zoning with appropriate mixed use built form typologies". The scope of the study expressly included employment and economic possibilities, housing opportunities, transport considerations, public domain improvements and place making. 140. The Parramatta Road Urban Renewal Program Draft Memorandum of Understanding dated 27th of May 2014 and the Project Brief-Leichhardt Industrial Lands Study also issued in May 2014 marked a distinct shift in focus from the earlier Strategic Sites, Centres and Corridors Project which was caused by the proposal of the State Government to carry out the WestConnex project. The Leichhardt Employment Lands Study released in December 2014, specified the consideration of WestConnex within its scope of works and recommended the retention of IN2 zoned industrial land within the Leichhardt LGA. 141. The subsequent stage 2 analysis contained within the Leichhardt Industrial Precinct Planning Interim Report recommended a B5 zone in the Camperdown Industrial area which would accommodate a capped number of residential dwellings. This interim report was provided to Urban Growth for consideration and its recommendation for the Camperdown area was largely echoed in the Parramatta Road Urban Transformation Strategy which recommended an 'Enterprise and Business' zone. 142. Subsequent to the release of the Parramatta Road Urban Transformation Strategy, in June 2017 the Inner West Council received and noted a report that recommended that additional studies be completed before making large-scale amendments along the Parramatta Road Corridor. 143. In my opinion, Leichhardt Council had begun the process of examination of the potential for rezoning of the Camperdown industrial area without taking consideration of WestConnex. After additional information regarding the locations and impact of WestConnex became available, in May 2014 Council substantially redefined the scope of their study from urban renewal towards protection of industrial lands. It is evident that due to the ongoing strategic planning changes occurring in relation to Parramatta Road and the WestConnex project, Leichhardt Council, and subsequently the Inner West Council, have retained the existing IN2 zoning while conducting additional studies into the impact of the strategic planning policies occurring due to WestConnex. 144. Based on the evidence outlined above, it is my opinion that the IN2 zoning was retained due to the WestConnex project and the consequent preparation of the Parramatta Road Corridor Urban Transformation Strategy. It has prevented the rezoning of the land that was previously anticipated (being a rezoning that would have been implemented well before the sites were acquired by the RMS). 145. For me to have a robust opinion about the controls that would have applied following the rezoning, had the Westconnex (sic) project not arisen, I would need to consider the results of an urban design analysis of the kind that was anticipated by the Council when it resolved that a Strategic Sites, Centres and Corridors Study for Parramatta Road from Johnston St to Mallet St and Johnston's Creek be brought forward. ...
The Applicants rely heavily on the shift in Council's position as posited by Mr Cirillo (Tp11). They argue that the Memorandum of Understanding referred to in the disclosure documents "was the trigger of change" (Tp16, L20).
Mr Hemmings says that the "holding back" of the zoning sounds in "a $18M difference in land value" (Tp12, LL2-7), and he referred also to a town planning report, prepared for the RMS by Anthony Rowan, which arrives at an opinion different from Mr Cirillo's (Rowan's report of 22 February 2017 is before the Court in tab E of Exhibit "KED-3" to Doyle's affidavit of 23 November 2018, at folios 248-281).
Mr Hemmings concedes that those "foundational" elements of the Applicants' case are "going to be contentious" (Tp15, L6-7), and that a "large number of documents" (perhaps 15,000) are captured by the disclosure documents, even as now narrowed, and "many hours might be involved" (Tp16, LL43-45).
However, he added, there is no suggestion by the recipients of the disclosure documents that "they couldn't do it" (Tp17, L6), nor that production is "overly onerous or oppressive" (Tp17, L44), and the Applicants have "tried very hard to limit the categories" of documents (Tp18, L42).

The Relevant Principles to Apply

It is not disputed that the same principles apply to setting aside all disclosure documents, whether NTP or subpoena, and counsel in the present matter agree on them.
I had reason to review the relevant authorities, as they then stood, in Young v King (No 3) [2012] NSWLEC 42.
Inter alia, I said in that judgment (at [41]-[66]): 41 Production of documents on subpoena or in response to a NTP will not be required or enforced by a court unless the subpoena or NTP has what is regularly called "a legitimate forensic purpose". (See NSW Commissioner for Police v Tuxford & Ors [2002] NSWCA 139). ... 51 Put simply, as mentioned above ([41]), the party seeking production of documents bears the onus of establishing that they are required for a legitimate or "proper forensic purpose", i.e. they have a high probability of proving to be "relevant" to the "main case", and may materially assist in the resolution of the issues in that case. ... 55 The test, in cases such as this, of the relevance of documents sought by NTP or subpoena which the court is asked to set aside, is well articulated in the major authorities. 56 The classic statement of the test is generally said to be found in the judgment of Beaumont J in Trade Practices Commission v Arnotts Ltd and Ors ("Arnotts") (1989) 88 ALR 90; (1989) 21 FCR 306, at 103 of the ALR report. According to Arnotts, the correct questions for the court are (emphasis added): Does the material sought have an apparent relevance to the issues in the principal proceedings, ie is adjectival, as distinct from substantive, relevance established? Does the subpoena have a legitimate forensic purpose to this extent? ... Is the subpoena seriously and unfairly burdensome or prejudicial? ... The test of adjectival relevance is satisfied if the material has apparent relevance. 57 His Honour concluded (also at 103, with emphasis again added) that the test was satisfied in that case because the documents sought "could possibly throw light on the issues in the main case". 58 The use of the word "possibly" in His Honour's finding has been said, by Spender J in Cosco Holdings Pty Ltd v Commissioner of Taxation ('Cosco') (1997) 37 ATR 43 at 439, to mean that: The material sought could reasonably be expected to throw light on some of the issues in the principal proceedings. It is not a question of looking at the documents to see if the documents might permit a case to be made. (emphasis mine). 59 Brereton J noted in Portal Software International Pty Ltd v Bodsworth ("Portal") [2005] NSWSC 1115, at [22], that it had become clear by that time that absence of apparent relevance is a sufficient ground to set aside a subpoena or a NTP. Where it is asserted that there is an abuse of process, "some onus would lie on the person contending that ... to make that allegation good" (at [28]), but where the question of relevance is raised it must be shown by the party issuing the notice rather than refuted by the producer (at [29]). 60 In ICAP Pty Ltd & Ors v Moebes & Anor ('ICAP') [2009] NSWSC 306, Nicholas J agreed with the construction adopted in Cosco , and in an unreported judgment in McLaughlin v Dungowan Manly Pty Ltd ('McLaughlin' - NSWSC 4924/06) on 14 July 2009, Ward J agreed with Nicholas J. 61 Ward J also noted (at [28] of McLaughlin ) that Nicholas J had expressed caution in ICAP about application of a test of "legitimate forensic purpose" which incorporates phrases like "on the cards" or "could possibly throw light on", but that Beazley JA (in Attorney-General (NSW) v Chidgey ('Chidgey') [2008] NSWCCA 65; (2008) 182 A Crim R 536) had found no reason to depart from the test or from the language adopted by Gibbs CJ in Alister v R ("Alister") (1984) 154 CLR 404. I will return to Alister and Chidgey. (See below, at [71] and [85] respectively). 62 Ward J noted (at [32]) that Nicholas J had stated the test (in [30]), in civil proceedings, in terms that (emphasis added): It must be shown that it is likely the documentation will materially assist on an identified issue, or there is a reasonable basis beyond speculation that it is likely that the documentation will. 63 Her Honour then observed (at [33]): That requires a consideration of the issues in the proceedings to which the subpoenaed documents are or may be of relevance in order to assess whether there is a legitimate forensic purpose served by the subpoena. ... 66 It is not contested that the same principles apply, in both civil and criminal matters, to setting aside a NTP (to a party), as to setting aside a subpoena (to a stranger): R v Saleam ("Saleam") [1999] NSWCCA 86, at [11]; Bailey v Beagle Management Pty Ltd [[2001] FCA 60]; (2001) 105 FCR 136.
I went on, in Young v King (No 3), to rely also upon the following summary, given by Craig J in Azar Building and Construction Services Pty Ltd v Transport Infrastructure Development Corporation ("Azar") [2010] NSWLEC 110, at [20]-[21]: 20. A consideration of the arguments advanced before me on 28 May indicated that the Subpoenas and Notice were framed in terms that did not enable it to be positively established that a legitimate forensic purpose was served by the Subpoenas and the Notice (Commissioner for Railways v Small (1938) 38 SR (NSW) 564; NSW Commissioner of Police v Tuxford [2002] NSWCA 139; Travel Compensation Fund v Blair [2002] NSWSC 1228). Whether such purpose is met in a given case will turn upon the connection between the issues raised in the proceedings and documents which are the subject of a subpoena or notice to produce. The requisite connection to be established has been variously described. Without intending to be exhaustive, it is apparent that a subpoena or notice to produce will be liable to be set aside where the party seeking production of documents cannot establish: (i) that it is "on the cards" that the documents will materially assist on an identified issue: Alister v The Queen (1984) 154 CLR 404 at 414; R v Saleam [1999] NSWCCA 86 at [11]; Attorney-General for NSW v Chidgey [2008] NSW CCA 65; 182 A Crim R 536 at [58] - [69]; (ii) that the material sought could reasonably be expected to throw light on some of the issues in the principal proceedings: Trade Practices Commission v Arnotts Limited (No 2) (1989) 21 FCR 306; 88 ALR 90 at 103; Cosco Holdings Pty Ltd v Federal Commissioner of Taxation [1997] FCA 1504; (1997) 37 ATR 432; (iii) that there is a reasonable basis for supposing that the material called for will likely add to the relevant evidence in the case: A v Z (2007) 212 FLR 255 at [4]; (iv) that it is likely the documents will materially assist on an identified issue or there is a reasonable basis beyond speculation that it is likely the document will do so: Air Canada v Secretary of State for Trade (No 2) [1983] 2 AC 394; [1983] 2 WLR 494; ICAP Australia Pty Ltd v Moebes [2009] NSWSC 306; ICAP Australia Pty Ltd v BGC Partners (Australia) Pty Ltd [2009] NSWCA 307. 21. The principle was extensively discussed in ICAP Australia Pty Ltd v BGC Partners (Australia) Pty Ltd. Tobias JA (in whose judgment Basten JA and Handley AJA agreed) considered at [22] the requirement for it to be shown that it is "likely" that the documentation sought will materially assist on an identified issue or the alternative requirement that there be a reasonable basis beyond speculation that it is likely the documentation will so assist was not relevantly different to a requirement that it be "on the cards" that the documents would materially assist on an identified issue. Importantly, all the tests, however stated, require identification of an issue or issues in the proceedings with some modicum of particularity which then becomes the measure against which the forensic purpose of the documents can be determined. It is that identification which must inform the requirement to produce the documents sought.
I then exhaustively reviewed the authorities (at [67]-[97]) before concluding (at [109]): 109 High Court and Court of Appeal decisions have set important restrictions and laid down clear principles, and I have surveyed many first-instance applications of those principles. You cannot compel production of documents to see if they may be relevant and/or of assistance. ...
So far as I am aware, my lengthy analysis in Young v King (No 3) has never been questioned, but it has, rather, been endorsed and applied many times; e.g. Pepper J followed it, as well as Azar, in Agricultural Equity Investments Pty Ltd v Westlime Pty Ltd [2013] NSWLEC 122, and Wingecarribee Shire Council v O'Shanassy (No 2) [2014] NSWLEC 32.
I had to revisit this area of the law in Alexandria Landfill Pty Ltd v Roads and Maritime Services; Boiling Pty Limited v Roads and Maritime Services (No 3) ("ALF No 3") [2017] NSWLEC 183 (see [13] to [27]).
In ALF No 3, my attention was drawn (see [20]-[27]) to some additional authorities to which I had not been taken in Young v King No 3, but I found them supportive of the position at which I arrived in that case (see ALF No 3 at [36]).
Accordingly, it is to those principles that I again resort in determining the present NOM.

Gaudioso v Roads and Maritime Services

At a glance

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